54 Million Adults Have Had Credit Card Balances For More Than a Year
A new Bankrate report found that 60 percent of U.S. adults who carry a balance on their credit card, or 54 million people, have carried a balance for at least a year—a rate that is unchanged from 2022 and up from 50 percent in 2021. Overall, 47 percent of credit cardholders carry debt from month to month, up from 46 percent in 2022 and 39 percent in 2021.
“We’re seeing triple trouble for anyone with credit card debt,” said Ted Rossman, Bankrate’s Senior Industry Analyst. “More people are carrying more debt, and interest rates have risen sharply.” Though credit card debt is more common in lower-income households, higher-income households are more likely to have been carrying debt for at least a year.
72 percent of credit cardholders with annual household incomes over $100,000 have carried credit card debt for at least a year, followed by 70 percent of cardholders with annual household incomes between $80,000 and $99,999, 63 percent of cardholders with annual household incomes between $50,000 and $79,999, and 53 percent of cardholders with annual household incomes under $50,000.
Among those with credit card debt, unexpected and emergency expenses are the most common cause for debt at 43 percent. This figure includes emergency car repairs (10 percent), medical bills (10 percent), home repairs (8 percent), and other surprise expenses (14 percent). Other causes for debt include day-to-day expenses (25 percent), clothing or electronics (16 percent), and vacation or entertainment (11 percent).
By generation, Gen X (ages 43-58) and Gen Z (ages 18-26) cardholders are the most likely to carry a balance from month to month, at 53 percent and 52 percent respectively. Comparatively, 49 percent of millennial (ages 27-42) cardholders and 41 percent of baby boomer (ages 59-77) cardholders carry a balance from month to month.
“Contrary to popular belief, it’s usually very practical things that push people into debt,” said Rossman. “It’s so important to make credit card payoff a priority. If you only make minimum payments toward the average balance at the average interest rate, you’ll be in debt for nearly two decades.”